Minimum Wage and the Quaint Little Diner

I had the pleasure of vacationing in southern Utah last week and spending time in a couple of their breathtaking national parks.  I have been to several remote parts of the United States, but I have to say that the “otherworldly” landscape of Bryce Canyon and Zion National Parks, as well as the few towns tucked in between them, made me feel as though I was on a different planet, albeit a life giving one.

The town I stayed in did not have a full-service grocery store within 40 miles.  No Walmarts, no Home Depots, not even a small local chain store or chain restaurant.  But what it did have was a few quaint little restaurants and unique gift shops.  Since this time of year is considered off-season, some of the shops were open only certain days, while some opened every day and were closed “whenever we feel like it” (as one sign said).  One of the places I was fortunate to find that was open was a diner that seated a maximum of maybe 50 people.  The chairs didn’t quite match, and the walls were plastered with old posters and some service ads:  Snow removal for a fair price, read one ad scrawled on notebook paper.  But regardless of the yesteryear feel of the place, the food was inexpensive and delicious, rivaling any big city fare.

It got me to thinking about how difficult it must be to run a place like this diner.  Food prices change, regulations change and the business is very seasonal – teeming with tourists in the summer and ski season – but all but dead in between, making revenues unpredictable.  The challenges that could be more easily dealt with by a national restaurant chain are obstacles for a small town diner.

So imagine if this diner had to pay a minimum wage of – say – $12.25 an hour, as is the case now for employers in San Francisco.  What would happen?  Well, unique places that both liberals and conservatives love would likely disappear.

  • A comic book shop owner in San Francisco claims he will need to raise an additional $80,000 a year in order to cover San Francisco’s eventual wage hike of $15 an hour in 2018.
  • Seattle’s $15 an hour minimum wage has prompted the closing of some of their locally owned businesses.
  • While minimum wage proponents argue that increasing wages will give workers more money to buy things and thus, boost the economy and lift people out of poverty, Forbes contributor Maxford Nelson of the Freedom Foundation argues that has been far from the case.

Of course, a small town in Utah is a different demographic from Seattle or San Francisco, but Washington’s failed experiment may well escape its borders.  Senator Patty Murray sponsored legislation that would increase the federal minimum wage to $12 an hour by the year 2020.

Even without raising the minimum wage, the cost of inputs for small businesses can be staggering.  Consider New York City, for example.  A recent article in the Atlantic’s City Lab detailed how the high rents in the city are driving small, independent businesses out while national chains remain.

The irony in all of the push to increase labor costs is that proponents of arbitrary minimum wages tend to hate chain stores in favor of small, independent retailers and businesses.  Yet the mandatory “living” wages they stand out in front of chain stores to protest about are really not hurting national chains as much as they are the quaint, local stores they want to protect.

 

 

 

 

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  1. Fred says:

    The problem in these cities is the rent, not the wages! Thanks to the foreign speculators and the tech industry you can’t afford an apartment in San Francisco.

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